Oil below $115 on demand worries

London: Brent crude slipped toward $115 a barrel on Monday as concern about demand ahead of a key Opec meeting later this week weighed on the market.

Signs that high prices are destroying demand in the West, confirmed by the worst US jobs report since September, are worrying a group of Opec’s core members led by Saudi Arabia. They will push for a rise in output to reduce prices and support economic growth but are expected to meet opposition from Iran and Venezuela.

“There is no need to increase Opec production in the 159th meeting of this organisation,” said Iran’s Opec governor, Mohammad Ali Khatibi, according to reports citing the Oil Ministry website SHANA.

Brent crude was down $1.09 at $114.75 at 2:56pm, while US crude fell 95 cents at $99.27 a barrel.

“Think the job report from Friday is still to be digested by the market. It lowered the probability of rate hikes in the US and the outlook for growth,” said Thorbjoern Bak Jensen, oil market analyst at A/S Global Risk.

“Oil should get support from the direction in the EUR/USD, but we have an Opec meeting coming up and a lower growth outlook,” he added.

The dollar was down 0.04% as firmer hopes of a new bailout for Greece and a convincing victory by Portugal’s centre-right PSD party ended months of uncertainty in debt-stricken country supported the euro.

Deliveries to the US oil hub of Cushing via TransCanada Corp’s 591,000 barrel-per-day (bpd) Keystone pipeline restarted, one week after being shut by a leak at a Kansas pumping station.

MIDDLE EAST SUPPORTS

A violent weekend in the Middle East could provide a floor to prices by reviving worries about clashes spreading to the world’s largest oil and gas producers and disrupting global supplies.

Syria said 23 people were killed in Sunday’s protest near the Golan Heights after Israeli troops fired at Palestinian demonstrators marching to the frontier fence.

But protests against Syria’s own president Bashar al-Assad were also bloody as the nation’s forces shot 31 people dead during demonstrations in a crackdown that has killed at least 1,100 people over the past two months.

And an absent president in Yemen was celebrated by protestors in the streets of Sanaa, who interpreted his absence as a sign he was losing his grip on the country.

President Ali Abdullah Saleh was in Saudi Arabia recovering from an operation to remove shrapnel from his chest.